Claria Withdraws IPO, Cites Unfavorable Market Climate

Claria will not proceed with its proposed $150 million initial public offering, the company said Wednesday, citing an unfavorable market climate.

The Redwood City, CA, adware maker notified the Securities and Exchange Commission that it was withdrawing its IPO filing made in April. However, Claria said it might sell shares in a private offering.

Claria's IPO filing showed the controversial firm as highly profitable. It reported net income of $34.8 million on $90.5 million in sales during 2003. Much of its success has come from its relationship with Yahoo's Overture Services, which accounted for 31 percent of its 2003 sales. Overture's paid listings appear on Claria's SearchScout service, which displays alternative search listings in a pop-under window when users execute searches.

Since Claria's filing in April, the market has soured on Internet stocks. Sector bellwether Yahoo's stock has fallen 50 percent in that time, and investors have publicly questioned the valuation targets for Google's $3.5 billion offering. In another sign of the tough market for Internet offerings, gay-themed Web site PlanetOut told the SEC Wednesday that it would postpone its $75 million IPO, also filed in April.

In addition to Google, a few search-related companies still plan to raise capital in the public markets. E-commerce search engine Shopping.com plans a $142 million offering, and local search provider Interchange Corp. filed for a $28.8 million IPO. Neither company has set a date for its offering.